Evening Standard comment: The pressure on London’s renters

Housing has become a big political issue but ministers’ energies are mostly still devoted to helping homebuyers. Far less attention is given to renters, who now constitute more than half the market in London. Of those, half are in the social housing sector, half in the private sector where, as we report today, rents have rocketed by almost eight per cent in the past year, about three times the inflation rate. This is by any standards an enormous increase and disguises far greater than average rises in some areas.

The rises are made more important by the fall in social and council housing and a corresponding increase in private rentals, from 16.6 per cent of all London homes in 1981 to a quarter now. At the same time, owner occupancy has returned almost to 1981 levels after a surge in the intervening decades. Some renters are plainly being displaced from the housing market by high prices.

Owning a home isn’t the default option in parts of Europe; in Germany, for instance, renting is a respectable and sensible way of life for many people. Indeed that was once the case in London. One solution to the problem of rents is to learn from Germany. There, big institutions such as insurance companies are long-term investors in rental property and longer-term lets are correspondingly more normal than here and prices far more affordable.

British investors are wary of entering the rental sector, perhaps because the market in the capital is so fluid, but these are difficulties that should not be impossible to surmount. The Government is right to be helping the housing market in general and supporting those trying to buy a home but it should also be thinking seriously about how best to help institutions invest in affordable rental accommodation. Labour, meanwhile, has been giving thought to policies that would curb exploitative private landlords. Both approaches will help beleaguered renters: as today’s London figures suggest, they face a squeeze that is rapidly becoming intolerable.

Creating jobs

London has been far more resilient in its employment rates than the rest of the country during this recession, so it was sobering to learn from yesterday’s jobless figures that unemployment in the capital rose by 30,000 in the last quarter, or nearly nine per cent, to 384,000. The Government insists that the rise can partly be attributed to the reclassification of people who were previously on incapacity benefit but are now classed as available for work and other such factors. Nevertheless, yesterday’s figures marked a significant worsening of the employment picture both nationally and in the capital.

Yet London’s diverse labour force and businesses still create far more jobs here than in depressed parts of the North. In particular, a vigorous programme of investment in infrastructure and especially in transport — notably Crossrail — is both preparing the economy for better times and creating thousands of jobs now. The Government could also be thinking about short-term fiscal measures, such as reducing National Insurance further to boost employment. But London’s labour market is adaptable: the recovery will start here.

Safer cycling

Deaths and injuries among London’s cyclists could be reduced by a Satnav device which tells lorry drivers they are entering one of 100 “warning zones”. Last week saw another cyclist, Dr Katharine Giles, killed by a lorry. At £250 each, the cost of the new Satnavs seems a small price to pay for helping save lives.